Links International’s 2022 Q1 Hong Kong Job Market Updates
Links’ Hong Kong Job Market updates, provides data-based analysis of the Hong Kong job market based on a number of data sources including Hong Kong Labour Department statistics, HK job posting numbers and response rates in respect of a ‘basket’ of common commercial job types in Hong Kong.
Hong Kong Job Postings Increase 20% YoY despite Fifth Wave
Despite the worst COVID outbreak since the pandemic began, the Hong Kong job market is increasingly short on talent resulting in a 20% year-on-year growth in job postings in Q1.
The job market saw an 8% drop in December and January due to the year-end seasonal dip, but then recovered much stronger than expected despite the soaring COVID cases. The rally at the end of Q1 meant job postings were up 20% y-o-y. This was in part driven by the increasing number of professionals leaving HK due to strict social distancing measures, causing higher demand for talent to fill certain roles.
As Hong Kong moves out from the hit of the fifth wave, restrictions are expected to begin to loosen in phases and Government support schemes are due to come into effect in Q2. These factors could act as the catalysts needed to push the job market to new highs in 2022.
IT & Financial Roles Defends Hong Kong 2022 Q1 Job Market Amid 5th COVID Wave
The job market was largely supported by the strong performance of the Finance and IT functions, with the IT function seeing demand increase by a huge 18% in Q1. Functions more vulnerable to COVID like Admin & HR and Marketing & PR saw negative growth, dropping 2% and 6% respectively. The Sales function was flat for the quarter, increasing only 1%.
The high demand for IT and Finance professionals is in part attributed to an exodus of talent, as more than 40% of people surveyed by the American Chamber of Commerce in Hong Kong cited travel restrictions as the reason they are more likely to leave HK.
This in turn is having a positive effect on the job market for these functions, as businesses have more vacant positions available that were typically filled by an overseas labour force, boosting the need for local talent.
| Job Function | January | February | March |
|---|---|---|---|
| Finance | -3% | 6% | 6% |
| Admin & HR | -1% | -3% | 2% |
| IT | -1% | 5% | 14% |
| Marketing & PR | -4% | -3% | 1% |
| Sales | -4% | 2% | 3% |
Unemployment Rates Remain at Same Levels as Fifth Wave Bites
Unemployment rates improved in the final month of 2021 but then plateaued as we moved into 2022. The fifth wave of COVID is likely to have had a direct impact on the standstill in unemployment rates as businesses and workers assess the situation.
| Period | Unemployment Rate | Percentage Increase from Previous Period |
|---|---|---|
| October – December | 3.9% | -0.2% |
| November – January | 3.9% | 0.0% |
| December – February | 3.9% | 0.0% |
The total unemployment rate decreased 0.2% since our last job market update, meaning total employment increased to 3,676,500 from 3,673,300 reported in the last Job Index.
Unemployment Rates According to Sectors:
| Period | Manufacturing | Construction | Import/export trade and wholesale | Retail, accommodation and food services | Transportation, postal and courier services | Professional and business services | Public administration |
|---|---|---|---|---|---|---|---|
| October – December | 5.6% | 5.1% | 3.7% | 5.4% | 4.6% | 2.8% | 1.6% |
| November – January | 4.9% | 4.7% | 3.9% | 5.5% | 4.1% | 2.6% | 1.6% |
| December – February | 5.1% | 6.2% | 3.7% | 6.9% | 4.4% | 2.7% | 2.2% |
The impacts of the fifth wave of COVID are shown in the spike in unemployment rates for industries particularly exposed to the impacts of COVID during the December-February period. This includes a 1.5% and 1.4% increase in the construction and retail industries respectively.
The rise in unemployment in these industries will come as a blow to the Hong Kong businesses environment, which had been recovering after a prolonged period of low COVID infection cases. With a higher than expected, 360,000 applications for the government’s one-off HK$10,000 subsidy under the Temporary Unemployment Relief Scheme, unemployment rates in the following periods are expected to rise for susceptible industries but should stabilise after passing peak infection rates.
Government Schemes to Stimulate the Economy and Job Market
As we go through the worst phase of the pandemic Hong Kong has faced, businesses and workers are feeling the squeeze from the reimposed strict social distancing measures. Hong Kong is also experiencing an exodus of talent due to its dynamic “zero-COVID” approach which could potentially mean more positions could open up and impact the job market. Although unemployment rates are likely to increase in March 2022, the imminent government support measures should provide a cautious boost in business confidence.
A new round of the Employment Support Scheme (ESS) will be launched to subsidise employee wages for struggling businesses for the period between May and July, while HK$10,000 consumption vouchers will be distributed to residents to stimulate the economy. Scheduled premises such as fitness centres and beauty parlours are to open and dine-in services after 6 pm are expected to resume from 21 April.
The ESS and consumption vouchers were proven to be a success in stabilising the economy when they were first introduced last year. We are cautiously optimistic that the reintroduction of the schemes will help prevent major downturns in the job market and any drastic fluctuations in unemployment rates in Q2.
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